Correlation Between VanEck Semiconductor and Baloise Holding

Can any of the company-specific risk be diversified away by investing in both VanEck Semiconductor and Baloise Holding at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining VanEck Semiconductor and Baloise Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VanEck Semiconductor UCITS and Baloise Holding AG, you can compare the effects of market volatilities on VanEck Semiconductor and Baloise Holding and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in VanEck Semiconductor with a short position of Baloise Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Semiconductor and Baloise Holding.

Diversification Opportunities for VanEck Semiconductor and Baloise Holding

-0.8

Correlation Coefficient

VanEck Semiconductor  Baloise Holding

Pay attention - limited upside

The 3 months correlation between VanEck and Baloise is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Semiconductor UCITS and Baloise Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baloise Holding AG and VanEck Semiconductor is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on VanEck Semiconductor UCITS are associated (or correlated) with Baloise Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baloise Holding AG has no effect on the direction of VanEck Semiconductor i.e., VanEck Semiconductor and Baloise Holding go up and down completely randomly.

Pair Corralation between VanEck Semiconductor and Baloise Holding

Assuming the 90 days trading horizon VanEck Semiconductor UCITS is expected to under-perform the Baloise Holding. In addition to that, VanEck Semiconductor is 2.23 times more volatile than Baloise Holding AG. It trades about -0.09 of its total potential returns per unit of risk. Baloise Holding AG is currently generating about 0.23 per unit of volatility. If you would invest  16,410  in Baloise Holding AG on December 30, 2024 and sell it today you would earn a total of  2,560  from holding Baloise Holding AG or generate 15.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

VanEck Semiconductor UCITS  vs.  Baloise Holding AG

VanEck Semiconductor

Risk-Adjusted Performance

Very Weak

Over the last 90 days VanEck Semiconductor UCITS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Etf's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the fund sophisticated investors.

Baloise Holding AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Baloise Holding AG are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Baloise Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VanEck Semiconductor and Baloise Holding

The main advantage of trading using opposite VanEck Semiconductor and Baloise Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Semiconductor position performs unexpectedly, Baloise Holding can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Baloise Holding will offset losses from the drop in Baloise Holding's long position.

The idea behind VanEck Semiconductor UCITS and Baloise Holding AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the FinTech Suite module to use AI to screen and filter profitable investment opportunities.